South Korean Police Charge 26 Polymarket Users With Illegal Gambling

South Korean authorities have booked 26 local users of prediction market platform Polymarket on suspicion of illegal gambling, with 18 of them referred to prosecutors, according to a report from Asia Business Daily.

Charges and the Amounts Involved

The Gangwon Provincial Police Agency’s cyber investigation unit led the case, finding that the 26 individuals placed combined wagers of roughly 17.6 billion won, about $12.7 million. The single largest stake by one person came to around 5.7 billion won, or roughly $4.1 million. Police said betting on yes or no event contracts through Polymarket qualifies as illegal gambling under Article 246 of South Korea’s Criminal Act, since users are staking assets on outcomes they have no control over.

Users Push Back, Calling It a Derivatives Market

Those charged reportedly argue that Polymarket functions more like a crypto-based derivatives market than a gambling platform, pointing out that contracts trade on an order book and can be closed out before they expire rather than simply settling on an outcome. Whether that argument holds up is expected to be the central question if the cases move forward in court.

The charges follow South Korea’s media regulator blocking domestic access to Polymarket last month after determining the platform created an illegal gambling environment. At the time, Polymarket had argued it shouldn’t be classified as gambling in Korea since it’s non custodial, doesn’t accept Korean won, and no longer offers services in Korean. The Block reported it has reached out to Polymarket for comment.